Probe into South Korea ferry's finances widens

South Korean prosecutors investigating last week's tragic ferry crash raided the home of the company's owner as part of a widening probe in the wake of the disaster, which killed 157 people and left 145 still missing.

About 50 investigators went into the offices of Cheonghaejin Marine, the operator of the ill-fated Sewol, and its affiliates, as well as homes of the company's owner, Yoo Byung-eun, and his family, in search of accounting books and documents, prosecutors said. The probe also encompassed a church with links to Mr Yoo and his family.

"We are looking into overall problems related to the company's management, including possible embezzlement and breach of trust by the Yoo family," said Kim Hoi-jong, prosecutor at the Incheon District Office in charge of the investigation. He added that Mr Yoo and his family members were also suspected of tax evasion, illegally hiding assets abroad and lobbying government officials. 

The investigation will seek to determine whether the owner failed to fulfil his duty of properly managing the company, prosecutors said. Many of the Sewol's 29 crew members told prosecutors they have not received proper safety-related education and training.

The finances of Chonghaejin and its complex share structure have come under the spotlight after its ferry Sewol sank 20km off the southwestern coast of South Korea last Wednesday.

Mr Yoo and his family have a family fortune of some Won240bn ($230m) after establishing a chain of overseas and domestic affiliates. The debt-ridden Cheonghaejin Marine is a successor to Semo Marine, which went bankrupt in 1997, following a capsized cruise ship and series of scandals. Mr Yoo served a four-year prison sentence for fraud in 1991. 

"We will humbly accept all responsibility for this accident and will not hesitate to do anything to console the pain of victims and grieving families," Mr Yoo's family said in a statement.

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Prosecutors are also expanding their probe into broader problems in the country's shipping sector, including possible corruption and lobbying attempts to win approval for renovating ferries and to pass related safety checks.

The government said on Wednesday that it plans to carry out intensive safety checks on the country's large industrial and transportation facilities to prevent other disasters, after the government came under fire for its botched operation to rescue survivors of the ferry disaster and poor handling of the crisis.

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